Connectyx wins fight in thumb war for MedFlash deal with Cardinal

A Florida startup company has emerged over competitors, including one in Columbus, to nab a national distribution deal with Cardinal Health Inc. for MedFlash, a data storage device and Internet-based service to create a portable medical history that a patient can share with doctors, pharmacists and paramedics.

Entrepreneurs are adding software to keychain-size devices, known as thumb or flash drives, so they can launch password-protected Web sites where patients then enter their chronic conditions, prescriptions and image files such as MRIs and X-rays. The information is stored on both the site and drive.

So far, the makers report an enthusiastic response from Americans who've grown tired of hospitals and physicians squabbling over who should pay to create a system of electronic medical records.

"Why should the consumer sit back and wait for somebody else to make a decision when it comes to their safety?" said Al Forcella, chief operating officer of Connectyx Technologies Corp. in Palm City, Fla., which makes MedFlash. "The response from the consumer market tells us we're right."

The deal with Cardinal Health puts MedFlash on the shelves of the Dublin-based corporation's Medicine Shoppe International Inc. pharmacies and makes it available to giant drug chains.

The health products distributor offers pharmacies everything from candy to hair dryers to walkers - products the stores need to market themselves as one-stop health centers while profit margins on prescription drugs shrink, said Cardinal spokeswoman Tara Schumacher. When choosing what to distribute, Cardinal focuses on consumer demand, cost and the product standing within a category, she said.

"We've proved to Cardinal that the product has traction," Forcella said. "Consumers will pick this up at a point-of-purchase display."

The five-year-old Connectyx, which went public in a reverse merger last November, also got MedFlash placed this week in about 150 Kroger Co. stores in the Columbus, Cincinnati and Dayton regions. Kroger also stocks MedFlash in its Quality Food Centers, and Connectyx has an exclusive supply agreement with United Drugs, a coalition of more than 1,000 independent pharmacies.

Connectyx on May 20 reported a $104,000 loss on revenue of $82,000 for the quarter that ended March 31, showing a surge from sales that totaled $144,000 for all of 2007, when the company lost $591,000. The company, which also makes software that helps physicians collect on insurance claims after they're denied, launched MedFlash in January and witnessed a rush of sales following a mention in a motorcycle magazine.

Columbus competitor

John Boyd, CEO of Columbus-based Critical Medical Information LLC, started marketing a similar storage device, called My Critical Medical Information Plus, last fall and said he's in talks with Cardinal and Kroger. "It's all being in the right place at the right time," he said.

Boyd's had more success in partnerships with medical associations, such as the Epilepsy Foundation of Central Ohio, which market My Critical Medical Information Plus with their own brands to those most likely to carry medical records for emergencies.

Cash flow is now positive, Boyd said, but the company hasn't recouped its initial investment. He declined to release specific financial figures.

MedFlash has a retail price of about $35, with a $13 annual renewal fee for the Web site. The company is seeking more partnerships with medical and lifestyle Web sites that can offer free or discounted services to MedFlash members, Forcella said.

Critical Medical charges about $80, with annual renewal at $25. The service is for up to six people and includes software to generate a living will and medical power of attorney, customized to varying state laws.

Because the products are so new, it's difficult for customers to differentiate services and prices, Boyd said.

"The reaction of our customers has been they're getting a very good value," he said.

"There's a market for it because we get daily requests for the old-fashioned medical bracelets," he said. "Everything else was too dadgone expensive for people to see real value in it."

MedFlash also matches well with a new medication management program that Kroger pharmacies are starting, Cornelius said. Pharmacists will offer to review all medications that customers are taking to watch for possible interactions.

"We really needed another medium that we could load all encounters with them, that was portable and neat," he said.

Meanwhile, Connectyx and other companies early to the market are monitoring national debates among policy makers over adopting electronic medical records, so that a government fiat on format doesn't render the devices obsolete.

"It's nice to have a product that's at the beginning of the life cycle instead of in a mature marketplace," Forcella said. "We don't have to go out and sell the concept. Everywhere you look people are talking about electronic health records."